The Internal Revenue Service (IRS) received an
appropriation of $203 million in American Recovery and Reinvestment Act of 2009
(Recovery Act) funds.However, the IRS
did not always comply with the Recovery Act and its implementing guidance in
planning and awarding Recovery Act funded procurements.When Recovery Act procurements do not comply
with the various transparency and accountability requirements, the reliability
of Recovery Act spending information is impaired, and taxpayers will not have
the ability to see how Recovery Act funds were used by the IRS.

WHY TIGTA DID THE AUDIT

This audit was initiated because the Recovery
Act created specific guidelines and requirements for all procurements funded by
the Recovery Act to ensure that Federal agencies effectively manage these
procurement activities.The overall
objective of this review was to determine whether the IRS has complied with the
Recovery Act and its implementing guidance in planning and awarding Recovery
Act funded procurements.

WHAT TIGTA FOUND

TIGTA found that the IRS did not always comply with
the Recovery Act and its implementing guidance in planning and awarding
Recovery Act funded procurements.TIGTA
identified three procurements totaling approximately $58,000 that were not
timely reported to the Department of the Treasury or the Office of Management
and Budget, and were awarded without meeting Recovery Act procurement
requirements.This oversight occurred
because IRS program offices did not notify Procurement Policy of these planned
Recovery Act procurements in accordance with IRS guidance.In addition, TIGTA determined that the IRS Office
of Procurement Policy did not take immediate corrective action once these
unreported procurements were discovered.We reviewed all 19 awarded Recovery Act procurements that were properly
reported and determined that only one procurement action met all Recovery Act
planning and award requirements.

Due to the limited time remaining for awarding
Recovery Act procurements, TIGTA is not making a recommendation to address the
control weaknesses identified in this audit.However, TIGTA believes the IRS should document lessons learned from the
implementation of the Recovery Act requirements.

WHAT TIGTA RECOMMENDED

TIGTA recommended
that the Director of Procurement evaluate the control weaknesses and
noncompliance issues identified during the audit and document any lessons
learned which could be used as a reference for future legislation that may
include special requirements for procurements, including tracking and reporting
requirements and management control reviews.

IRS officials
agreed with our recommendations and stated that the Office of Procurement plans
to work with its operating divisions to document any lessons learned, including
an assessment on Recovery Act reporting and a discussion on ways to improve the
process.Going forward, the Office of
Procurement also plans to ensure that all procurement managers are briefed on
new legislation, including any special requirements for planning,
awarding, tracking, and reporting procurements.

READ THE
FULL REPORT

To view the report,
including the scope, methodology, and full IRS response, go
to: